Ticker Shock: Three Reasons Blockbuster Will Fizzle

Friday's top stories and stocks with potential to move.

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Was this a long week or is it just me? I need a drink!

Asian stocks rose overnight, but just a smidge. The Hang Seng and the Nikkei were up 0.15% and 0.76%, respectively. Meanwhile, European stocks were in slightly positive territory earlier this morning. And here in the US, we're currently trading lower.

Here's what I'm focused on this fine Friday morning:

Blockbuster (BBI): Excluding items, the rental chain put up a loss of $0.19 in the second quarter, which isn't great, seeing as how analysts were expecting a loss of $0.11.

Topping things off, its CFO offered the following in the release:

"Due to ongoing challenging trends and market dynamics, combined with continued softness in top line performance and conservative comparables assumptions for the remainder of the year, we currently expect full year adjusted EBITDA to range between $270 million and $290 million, which corresponds to a GAAP range of a net loss of $15 million to net income of $5 million. The updated full year adjusted EBITDA guidance compares to the previously provided range of $305 million to $325 million."

My thoughts:

1. Why should I try to belly up to Blockbuster now? The stock is under $1, which tends to scare me off like a horror movie. And keep in mind that the estimate for this year has come down over the last month or so. Its domestic comps were off a pretty hefty 17.8% in the second quarter.

2. With cable, Redbox, and Netflix (NFLX), doesn't Blockbuster have its hands full these days?3. With the shares now trading well under what I can rent a movie for, I sure would like to see insiders stepping up to the plate in the open market right now.

Nordstrom (JWN): The big-name retailer put up $0.48 a share in its second quarter, which was precisely what the Street had been looking for. Meanwhile, its revenue line appeared to be pretty much in line with expectations.

But the big news is, the company indicated it's looking for $1.50 to $1.65 for fiscal '09, which is decent because the estimate I'm seeing is $1.48.

My take:

1. The outlook it offered up for '09 is bound to raise some eyebrows, and we could start to see estimates move up as a result. But I don't understand how anybody can get too excited about Nordstrom, or retail in general for that matter.2. The company trades at a little over 18 times the upper-end of its '09 outlook (of $1.65). It also forecasts same-store sales to drop 9% to 12%. Does this sound like a bargain? And again, Nordstrom isn't alone -- a bunch of stocks in the sector are ahead of where they should be.

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